With the latest read on consumer prices showing the highest pace of inflation in four decades and a top Federal Reserve official signaling an aggressive push to raise interest rates, Wall Street suffered a notable sell-off on Thursday. Both the Nasdaq and the S&P 500 finished the session with losses of around 2%.
The fear of higher interest rates had a particular impact on the homebuilding sector. Signs that mortgage rates would be rising, and potentially dampened the hot hosing market, sent shares of PulteGroup (NYSE:PHM), Toll Brothers (NYSE:TOL), Lennar (NYSE:LEN) and D.R. Horton (NYSE:DHI) sharply lower.
Affirm (NASDAQ:AFRM) was another standout decliner on the session. The accidental release of financial data sparked a late-day sell-off, with the stock ultimately finishing lower by more than 20%.
Lumen (NYSE:LUMN) also saw a double-digit percentage tumble on earnings news. Shares dropped to a fresh 52-week low.
Looking at some of the stocks that avoided the overall market downturn, Black Rifle Coffee (NYSE:BRCC) soared in its first session as a public company, coming off a SPAC deal. Meanwhile, earnings news allowed Monarch Casino & Resort (NASDAQ:MCRI) to rally to a new 52-week high.
Sector In Focus
The prospect of higher interest rates put pressure on the homebuilding sector, as investors bet that rising mortgage rates would cool the hot U.S. housing market.
The release of data showing persistent high inflation and the prospects of an aggressive Fed contributed to the growing concern over higher rates. Investors also responded to the Freddie Mac Primary Mortgage Survey, which showed that the 30-year mortgage has climbed to its highest level since the pandemic.
These rate worries put pressure on homebuilders. PulteGroup (PHM) saw a decline of nearly 6%. Toll Brothers (TOL) and Lennar (LEN) both retreated almost 5%. D.R. Horton (DHI) declined 4%.
Black Rifle Coffee (BRCC) found significant investor interest as it came public through a SPAC deal. Shares rallied 30% on the session.
BRCC completed its de-SPACing transaction, a deal expected to bring the firm $150M in cash. Thursday’s advance added to gains posted last week by the company’s SPAC partner, Silverbox Engaged Merger Corp. I, when it announced shareholder approval for the deal.
On its first official day as a public company, BRCC rose $3.63 to close at $15.64.
The mistaken release of quarterly results sparked a late-day sell-off in Affirm (AFRM), which turned an early gain into a 21% decline by the close.
AFRM showed notable gains early in the session and held strength into the mid-afternoon. However, the Buy Now Pay Later fintech accidentally tweeted its financial results at around 1:30 p.m. ET. The figures spurred an investor exodus, with the stock tanking in the last couple of hours of trading.
The results showed a loss for its latest quarter that came in wider than analysts had predicted. Revenue rose 77% to $361M. Looking ahead, the company predicted revenue of $1.29B-$1.31B for 2022, with adjusted operating loss as a percentage of revenue predicted to be between 12% and 14%.
AFRM ended the session at $58.68, a decline of $16 on the day. The stock reached a high during the session of $83.57, before plunging to an intraday low of $50. That represents a swing of 40% from its daily high to its daily low.
All told, the stock has come dramatically off a 52-week high of $176.65 reached in early November. AFRM has lost about two-thirds of its value since that peak.
Notable New High
Earnings news sparked a gain of more than 6% in shares of Monarch Casino & Resort (MCRI). With the advance, the stock reached a new 52-week high.
The Reno-based casino operator announced a quarterly profit that exceeded consensus by about 13%. The firm’s revenue jumped 90% from last year’s pandemic-impacted results, rising to $111M. This beat projections by nearly $13M.
MCRI finished at $77.17, a gain of $4.70 on the day. The stock also set an intraday 52-week high of $79.19.
Shares plunged in January, reaching their lowest close since last February. Coming off that level, the stock has rallied substantially in the past couple of weeks. MCRI has climbed 30% since hitting that recent low on Jan. 27.
Notable New Low
Lumen (LUMN) plunged nearly 16% after the company issued disappointing results and guidance. The slide took the stock to a fresh 52-week low.
The telecom company reported a quarterly profit that missed expectations on revenue that fell nearly 6% to reach $4.85B. Looking ahead, the company projected an adjusted EBITDA figure of $6.5B-$6.7B for the full year.
LUMN dropped $1.99 on the session to close at $10.83. Earlier in the day, the stock set an intraday 52-week low of $10.74.
Shares had traded in a broad range since coming off a 52-week high $15.45 reached in June. Shares are down about 30% from that peak.
For more of the day’s top winners and losers, head over to SA’s On The Move section.